The question is who is left holding the bag? If the stakeholders get paid, they are happy. The new owner is debt free, and have an ownership, so that's good. It seems to me that it may go two ways: either the lenders will be left holding the empty bag, if they can't make the money back - and it's their fault for doing a bad due diligence; OR the company gets sold off piece by piece to satisfy creditors (if they can't make the business work), which again a good thing - what purpose serves a company that cannot produce a profit ?
This view is sufficient if you view corporations entirely as entities that serve to create profit. But this view ignores externalities which are not part of this mechanical description. Specifically, what perceived value the corporation provides that allows it to generate that profit. In Twitter's case its monetization has primarily been ads, so I'm referring to what makes people invested enough in the service to make it worth for advertisers to pay to show ads to these people.
But of course your view is what's reflected in law: the corporation exists to generate profit for its shareholders, so if killing and selling it for scrap (whether directly or by proxy in a leveraged buyout ending in a firesale) provides more benefit to its shareholders than keeping it operating at a small profit, that's the logical decision. The corporation is not really "a person", it's a vehicle for its stakeholders (or shareholders). A stable service puttering along without making big profits or losses is considered the bad ending.
